Sam Spiro: Buy now and save thousands. How the ‘super-deduction’ tax break can help SME’s like yours
Did you watch the Budget and wonder how all these tax breaks are helping your business? I come bearing good news: the super-deduction tax break is for businesses like you…and could save you thousands.
In fact, any business that pays corporation tax is eligible for the tax break. In the Budget, words like ‘plant’ and ‘machinery’ made it feel like the super-deduction tax break was aimed at huge corporations.
While the likes of Amazon will certainly be reaping the benefits, it’s worth checking with your accountant how you can benefit too. If you’re purchasing IT equipment, or any new machinery for your business, there’s a good possibility you’re invited to the tax-break party.
Here’s how it works at a basic level. Let’s say you invest £10,000 in IT equipment. You’re now allowed a capital allowance of 130%, which means you could deduct £13,000 from your taxable profits. And with corporation tax at 19%, that’s a saving of £2,470!
Now is the time to act though. Rishi Sunak’s tax break is designed to stimulate investment in the short-term, so it’s only available between March 2021 and April 2023, after which the corporation tax rises to 25% and the tax break ends. If you’ve been debating an IT purchase to update old systems or accommodate future growth, it’s definitely worth chatting to your accountant to see how you can save money. Make sure you seek expert advice from your accountants on how this can work for you first, as there are exceptions.
The team here at Urban IT Solutions can help find the right equipment for your needs and even store it for you until you’re ready to use it. Don’t let this opportunity pass you by!